City of Davao vs. Intestate Estate of Amado S. Dalisay| G.R. No.

20779| July 15, 2015

1. The Estate of Amado S. Dalisay owned properties which were advertised for sale at a public
auction for nonpayment of real estate taxes
a. The public auction was scheduled on July 19, 2004.
b. No bidders appeared, thus, the properties were acquired by the City Government of
Davao (the City) pursuant to Section 263 of the LGC
2. On September 13, 2005, or more than a year after the public auction, the Declarations of
Forfeiture for the five (5) properties were separately issued by the City Treasurer. The common
provisions of the declarations read:
a. WHEREAS, the delinquent taxpayer or his authorized representative, has within a period
of one (1) year from said date of Declaration of Forfeiture as herein specified, to redeem
the property,…
b. hereby DECLARE AS IT HEREBY DECLARED the above described property FORFEITED in
favor of the City Government of Davao.
3. On October 3, 2005, the City caused the annotation of the five (5) Declarations of Forfeiture on
the corresponding TCTs of the properties.
4. Estate inquired from the City Treasurer’s Office regarding the amount of the redemption price
of the properties.
a. Real Property Tax Division of the City furnished the Estate copies of the billing
statements containing a handwritten summary of the amount showing the aggregate
total of P4,996,534.67.
5. Thus, on September 13, 2006, the Estate delivered a written tender of payment to the City
Treasurer and, at the same time, tendered the amount of P5,000,000.00.
a. The City, however, refused to accept the same.
b. This constrained the Estate to file the Notice to Deposit the P5,000,000.00 with the
Office of the Clerk of Court, RTC, at the disposal of the City Treasurer.
i. In doing so, the Estate was made to pay legal fees amounting to P75,200.00.
ii. An action for redemption, consignation and damages against the City was
consequently filed by the Estate with the RTC.
6. City’s defense: City admitted the existence of the billing statements, but it posited that their
issuance was not an admission that the Estate still had the right to redeem the properties.
a. The period of redemption had long expired on July 19, 2005, a year after the subject
properties were acquired by the City during the public auction for want of a bidder.
b. Hence, its refusal to accept the tendered amount was valid and for a lawful cause.
7. Estate countered that the reckoning date should be the one stated in the Declarations of
Forfeiture which corresponded to their date of issuance, to wit, on September 13, 2005
8. RTC: in favor of Estate; had right of redemption
9. CA: affirmed RTC
a. City had been remiss in its duty to immediately issue the Declaration of Forfeiture within
two (2) days from purchase of the property as required under Section 263 of the LGC.
b. The CA then explained that “redemption should be looked upon with favor, and where
no injury would follow, a liberal construction will be given to redemption laws,
specifically on the exercise of the right to redeem
Whether the one (1)-year redemption period of forfeited tax delinquent properties purchased by the
local government for want of a bidder is reckoned from the date of the auction or sale or from the
date of the issuance of the declaration of forfeiture? DATE OF AUCTION OR SALE

1. City argues:
a. no law provides that the one (1) year redemption period should be counted from the
date of the Declaration of Forfeiture. What the LGC simply provides is that the period of
redemption is “within one (1) year from the date of such forfeiture
b. Section 263 of the LGC does not order the City Treasurer to issue a declaration of
forfeiture within two (2) days from the date when tax delinquent real properties, sold at
auction sale, are purchased by the local government in the absence of a bidder. It
merely directs the local treasurer to make a report of his proceedings which shall be
reflected in the records of his office.
c. Assuming arguendo that the City Treasurer is mandated by law to issue a declaration of
forfeiture within two (2) days from the purchase of the properties, the City avers that it
should not be bound by the consequences of the malfeasance of its public officers. In
other words, the City invokes the doctrine that the principle of estoppel does not
operate against the government for the act of its agents, and that it is never estopped
by any mistake or error on their part
2. Estate argues:
a. the provision merely states that the redemption period is counted from “the date of
such forfeiture,” and the word “such” before the word “forfeiture” was resorted to in
order to avoid the repetition of the words “declaration of” before the word “forfeiture.”
b. The Estate likewise opposes the City’s theory that declarations of forfeiture have no
bearing in the determination of the period of redemption because the same were only
issued by the treasurer for registration purposes with the Register of Deeds. For the
Estate, there is a difference between redemption of property sold at a public auction
and redemption of property purchased by the local government unit for want of bidder.
The former is governed by Section 261 of the LGC, while the latter is covered by Section
263(2) of the same law.
3. Court agrees with CA that should apply the liberal application of redemption laws the ends of
justice are better realized.
4. BUT does a simplistic application of the liberal construction of redemption laws provide a just
resolution of this case? The Court answers this question in the negative.
5. While it is a given that redemption by property owners is looked upon with favor, it is equally
true that the right to redeem properties remains to be a statutory privilege.
a. Redemption is by force of law, and the purchaser at public auction is bound to accept it.
b. The Court cannot close its eyes and automatically rule in favor of the redemptioner at all
times. The right acquired by the purchaser at an execution sale is inchoate and does not
become absolute until after the expiration of the redemption period without the right of
redemption having been exercised. “But inchoate though it be, it is, like any other right,
entitled to protection and must be respected until extinguished by redemption
 6. The better theory that is consistent with the subject matter of the provision is that forfeiture
of tax delinquent properties transpires no later than the purchase made by the city due to lack
of a bidder from the public.
a. This happens on the date of the sale, and not upon the issuance of the declaration of
forfeiture. To rule otherwise would be similar to saying that prior to the accrual of the
local government’s right as a purchaser, an additional requirement of issuing a
declaration of forfeiture is necessary.
b. Not only is this duty unfounded, but it also places the local government in a vacuum
from the time of the auction up to the time it issues the document. It causes the absurd
situation, where the local government’s forfeiture of the property for want of a bidder
becomes an empty and meaningless exercise merely because the issuance of the
declaration of forfeiture came at a much subsequent time.
c. The contemplated “forfeiture” in the provision points to the situation where the local
government ipso facto “forfeits” the property for want of a bidder.

WON State in estoppel? No

1. The general rule is that the State cannot be put in estoppel by the mistakes or errors of its
officials or agents. Indeed, like all general rules, this is also subject to exceptions
a. . It may not be invoked where they would operate to defeat the effective operation of a
policy adopted to protect the public.
b. They must be applied with circumspection and should be applied only in those special
cases where the interests of justice clearly require it.
2. Court considers the peculiar fact involved in this case: the City Treasurer’s belated issuance of
the disputed Declarations of Forfeiture. Clearly, this irregularity had eventually shaped and
brought forth the subject controversy. Had it not been for the severe delay in the issuance,
there would have been no dispute and the reckoning period of the redemption period would
have been a toss between closer dates, rather than those claimed, which are years apart, to wit:
July 19, 2004 and September 13, 2005
3. It is the City that would suffer an injustice if it were to be bound by its officer’s suspect actions.
The policy of enabling local governments to fully utilize the income potentialities of the real
property tax would be put at a losing end if tax delinquent properties could be recovered by the
sheer expediency of a document erroneously or, perhaps fraudulently, issued by its officers.
a. This would place at naught, the essence of redemption as a statutory privilege; for then,
the statutory period for its exercise may be extended by the indiscretion of scrupulous
officers.
b. In other words, the period would become flexible because extensions of the period
would depend, not just on the sound discretion of the City Treasurer but on his attitude,
work ethics and worse, temperament.
4. Moreover, the Estate does not dispute the validity of the notices with respect to the public
auction. This brings the Court to the safe assumption that there was valid constructive notice as
to possible danger of forfeiture of the properties prior to the auction
a. The delay on the part of the Estate to at least inquire into the outcome of the auction
and its misplaced reliance on a curious document heightens the belief of the Court that
the City may not be deprived of a right that has long been vested in its favor. The odd
 timing in the issuance of the Declarations of Forfeiture and its very contents which
observably benefit the Estate to the core form a nagging doubt that may not be easily
shrugged off. This hinders the Court from applying the exceptions to the rule on
estoppel, when doing this would result in more impropriety
5. In this case, the period to redeem the subject properties of this case had long expired on July 19,
2005, and since then, the forfeiture of the properties had become absolute.
6. The failure of the Estate to validly exercise its right of redemption within the statutory period
had already resulted in the consolidation of ownership over the properties by the City.

Disposition: CA reversed. The action for redemption, consignation and damages filed by respondent
Estate is ordered DISMISSED.